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Negative outlook "painful" - Spinelegger.

| VIENNA, Feb 15 (KUNA) -- The US rating agency Moody's change of Austria's outlook to "negative" is "painful", said Vice-Chancellor and Foreign Minister Michael Spindelegger.

He did not think that the rating agency had already evaluated the Austrian government's entire new five-year package to save or raise nearly 27 billion euros, added the vice-chancellor.

"The savings package is adequate". Also, on some of the points raised by Moody's, Austria had little or no influence, for instance negative effects from other countries in its vicinity.

As for the Austrian banks - which Moody's believe may be over-extended in East Europe - Spindelegger said in comments before the weekly cabinet meeting that certain measures had already been taken, even if the risk in East Europe "cannot be steered from here." In general, the government saw no immediate need for further measures after Moody's announcement.

A similar view came from the conservative People's Party (VP) Finance Minister Maria Fekter.

Moody's had completed its European evaluation on Friday, and almost in parallel, the government in Vienna had presented its savings package. "Our commitment to cut down debts was not judged in its full extent." Head of the Austrian National Bank (OeNB), Ewald Nowotny, meanwhile contradicted the rating agency. Unlike Moody's, he said he did not believe the commitments of the banks in East Europe would put any additional pressure on Austria's international creditworthiness. The banks' activities in East Europe were, he stressed, "a success story."(end) amq.wsa KUNA 150943 Feb 12NNNN

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Publication:Kuwait News Agency (KUNA)
Geographic Code:4EUAU
Date:Feb 15, 2012
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